CREDIT CARDS

Credit Cards – how to choose the right card

Credit cards are not one size fits all.

Luckily it’s not hard to choose the right card – if you know how you’re going to use it.

Broadly speaking credit cards fall into one of three types.

Low Fee Cards.

Warning – this does not mean low interest rates. It usually refers to low annual fees.

These cards usually don’t have rewards programs.

Who are they good for? If you hardly use a credit card, but want one for emergencies or when it’s difficult to pay any other way, this is the card type for you.

Low Rate Cards

Likely to have a higher annual fee and no rewards program but charge lower interest rates.

Who are they good for? If you need to make purchases you can’t pay off right away, this is the card type for you.

Rewards Cards.

You will pay higher fees and higher interest rates but earn reward points toward purchases or travel.

You may also be entitled to free travel insurance and ‘concierge services’. The concierge service can be handy if you are especially time poor or traveling overseas where language is a difficulty. They can help with hotel and restaurant bookings, concert tickets even last minute flowers. Be warned though, you will probably be charged an extra fee for using the service.

Who are they good for? If you want to make lots of purchases through your card – to help track expenses, or simply to accumulate points – but plan to pay off the total balance by the due date, this is the card type for you.

Two Cards?

Does it ever make sense to have two cards, even though you’ll pay two lots of annual fee? READ MORE  [page 2/2]